Pedestrians walk past a Bank of China sign at its branch in Beijing, March 26, 2013. [Photo/Agencies]

SYDNEY - Australia's top finance and government officials joined the Bank of China president in Sydney on Monday to officially announce the Bank of China's Sydney branch's appointment as the clearing bank for the local renminbi market in Australia.

Bank of China President Chen Siqing said the development of an renminbi market would help cut the cost of currency trade between China and Australia.

"The official launch of the bank in Sydney represents an important step in the internationalization of the renminbi," Chen said.

Reserve Bank of Australia Governor Glenn Stevens said the ceremony on Monday marked an important step in the further development of a local renminbi market.

The key direct benefit of the official Australian renminbiclearing bank is that it can more efficiently facilitate transactions between Australian firms and their Chinese mainland counterparts using the Chinese currency, he said.

The Bank of China's attempt to step up its presence in the market comes after regulators and banks have for several years sought to remove barriers to the direct currency conversion between Australian dollars and yuan.

New South Wales Premier Mike Baird said only?one percent of trade with China was settled in renminbibut there was scope for this to rise significantly.

Stevens said process of renminbiinternationalization and the associated opening of China's capital account are likely to have significant implications for the global financial system.

"The Chinese authorities have indicated that they intend to continue renminbiinternationalization and capital account liberalization in the coming years," he said.

"As a result, the opportunities for Australian and Chinese investors to invest in each other's financial markets could grow significantly in the coming years."

"By increasing their familiarity with the renminbias an international transaction currency, local financial institutions, investors and firms are likely to be better placed to take advantage of these future opportunities as they arise."